Yes it is compatible.
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INSTALLATION ADVICE:
Anyone buying these should note that the add-ons do not install by default to the right directory: you must install them to where the main game is located; on Windows 7 it's here:
C:\Program Files (x86)\Paradox\King Arthur - The Role-Playing Wargame
Make sure you select 'add shortcut to desktop' for each install.
Click on your Saxons shortcut and select properties. For Windows 7 it should read
"C:\Program Files (x86)\Paradox\King Arthur - The Role-Playing Wargame\KingArthur.exe" win DLC:saxon
You Druids shortcut should read:
"C:\Program Files (x86)\Paradox\King Arthur - The Role-Playing Wargame\KingArthur.exe" win DLC:wales
The Saxons shortcut should give you the base game & Saxons campaigns and Druids shortcut gives the base game & Druids campaign. Long-winded but it works and will save you a lot of trouble.